Travelling and subsistence expenditure
Finance & Funding
Key learnings
- Employees who travel for work incur expenses that are expected to be reimbursed by the employer
- Travel and subsistence expenditure carries tax implications with it
- Business journeys such as travelling to a temporary workplace are generally exempt from taxation
- There are separate rules for site-based employees and home-based employees
Travelling and subsistence expenditure incurred by or on behalf of employees gives rise to many problems for employers from a reporting and taxation point of view. Knowing what needs to be declared, what needs to be reimbursed and what needs to be taxed is not always straightforward. Here, Ryecroft Glenton highlights the main areas to consider in deciding whether tax relief is available on travel and subsistence.
What is classed as a business journey?
A business journey is one which either involves travel:
- from one place of work to another or
- from home to a temporary workplace or
- to home from a temporary workplace.
Journeys between an employee’s home and a place of work which he or she regularly attends are not business journeys. These journeys are ‘ordinary commuting’ and the costs of these have to be borne by the employee.
The term ‘permanent workplace’ is defined as a place which the employee ‘regularly’ attends. It is used to fix one end of the journey for ordinary commuting. Home is the normal other end of the journey for ordinary commuting.
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